If you intend to share files on your LAN, you will only want one router for the whole setup.
That router (wired or wireless) gets connected to the DSL modem.
You can then run a cable to a wireless access point upstairs and a cable to a wireless access point downstairs. Both wireless access points should be set to operate on different channels (e.g., 1 and 6).
In this setup, your current Microsoft router can serve as both the router and the upstairs wireless access point.
You can connect an ethernet switch (quite cheap) downstairs to have additional ethernet ports. You would connect the downstairs access point to one of them. You can also connect a wireless router instead of a wireless access point downstairs, but you may need to connect it through a LAN port (and not the WAN port), you may need to use a crossover cable for this, and you will have to turn off its DHCP server (you do not want two active DHCP servers on a LAN). Alternatively, you could connect the downstairs router through its WAN port, but then the downstairs computers would be behind two layers of NAT, which is superfluous (in addition, NAT only passes IP traffic, which causes problems when sharing files with LAN protocols because the computers connected to this router may not see the computers connected to the upstairs router).